The fatal flaw of the universal basic income is the same one that hampers most existing anti-poverty programs: a lack of emphasis on encouraging work. Instead, these programs have sought to provide directly whatever poor people happen to lack. The result has been more than 50 years of massive public outlays, with little benefit other than making recipients dependent on government. The ongoing rise in worker’s disability claims follows a long string of recent expansions of welfare programs, such as food stamps, housing assistance, and even free phones to boost the standard of living among poor citizens.
In the coming months and years, California voters can expect to see a variety of tax increases pop up on their local election ballots. They will be called “public safety” taxes to hire more police or firefighters or “parks” or “library” taxes to pay for those popular public services. But don’t be fooled. Any new tax proposal is in reality a “pension tax” designed to help the California Public Employees’ Retirement System make up for shortfalls in its investment strategy.
The local picture is not much better, according to data released through Stanford University in October. Funded in part by a nonprofit that advocates pension reform and conducted by Joe Nation, a former Democratic assemblyman who is now with the Stanford Institute for Economic Policy Research, the study found that the city of Sacramento has more than doubled its contribution to CalPERS in the past nine years, going from $42.4 million in 2008 to $88.2 million in 2017. Sacramento’s pension costs are expected to reach about $150 million by 2022.
One study found that a $1,000 increase in the EITC led to a 7.3 percentage point increase in employment and a nearly 10 percentage-point reduction in the share of families in poverty. Its benefits are far-reaching, too. For lower-education single mothers, an additional $1,000 in the EITC is associated with a 6.7 to 10.8 percent drop in the share of infants being born with low birth weights, with bigger impacts for black mothers.
New research by David Neumark and Peter Shirley of the University of California, Irvine, shows that the effects are not just short-term, either. The EITC does not just boost earnings and reduce poverty rates when it is received, but improves the lifetime earnings trajectories of unmarried women with kids.
Were the Supreme Court to agree with Brown and uphold the appellate court rulings that seemingly repeal the California rule, it would be a huge setback for the unions – and a black eye for the local unions that opened the legal door by challenging the pension reform’s abolition of much-abused pension spiking and airtime.